IPOS: Fund raised on BSE more than doubles

Globally, 670 issues in CY21 thus far have raised $140 bn, most in over two decades

The global primary market is on fire with 670 initial public offerings (IPOS) of companies raising a collective $140.3 billion in the calendar year 2021 (CY21) until May 10, according to the latest report by Refinitiv, a global provider of financial market data and infrastructure. This is nearly four times the amount raised during the corresponding period in CY20.

In terms of exchanges, the BSE occupies the 13th spot in global rankings and has seen 26 IPOS thus far in CY21, with $2,731.7 million being raised, the Refinitiv data shows. In comparison, 11 IPOS had hit the Street during the corresponding period in CY20 and raised $1,172.9 million, the report said.

Given the Indian government’s ambitious divestment agenda of ~1.75 trillion, which includes stake sale plans in the country’s largest life insurer — Life Insurance Corporation of India (LIC) — most analysts expect a blockbuster year for the Indian primary market.

“This could be another major year for equity raising through IPOS. We continue to see a substantial pipeline of transactions that are at various stages of execution. As India’s economic growth accelerates, we shall witness a large number of high-quality promoters tapping the capital markets,” says R Venkataraman, chairman, IIFL Securities.

But uncertain market conditions can push the bulk of the Ipo/primary market activity to the second half of this financial year, including part offloading of stake by the government in select enterprises, according to analysts.

“Promoters and retail investors are likely to remain in a wait-and-watch mode until the Covid infection rate comes down and the stock markets stabilise. This can push the IPO activity to the latter part of the year. Besides attractive pricing, a stable market is necessary for IPOS to succeed,” explains G Chokkalingam, founder and chief investment officer at Equinomics Research.

Nasdaq at the top

At 670, the number of issues/ipos in the first five months of CY21 is the highest in two decades globally. In the calendar year 2000, 667 IPOS hit the Street globally and raised $82.3 billion in the corresponding period. The money raised thus far in CY21 also broke the 2007 record of $91.8 billion raised via 503 IPOS, the data shows.

The IPO boom is happening alongside a flurry of special purpose acquisition company (SPAC) listings, which have raised an additional $97.6 billion in CY21 thus far.

In terms of popularity, Nasdaq remains the most sought-after destination for IPOS, by both proceeds and number of deals, followed by New York, Hong Kong, London, and Shanghai. One in every five IPOS during CY21, so far, according to the report, has been in the technology sector, with these new listings accounting for 27 per cent of total proceeds.

“A record $33.9 billion has been raised on Nasdaq, so far, during 2021, more than five times the proceeds raised during the same period last year and the highest year-to-date total since our records began in 1970. A total of 105 new listings have been recorded, so far, during 2021, a 300 per cent increase in the number of listings from this time last year and a number last exceeded 21 years ago during the dot-com boom,” the Refinitiv report said.